Greece focused on quick debt deal

Wed Jan 25, 2012 1:10pm EST
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By Renee Maltezou

ATHENS (Reuters) - Greece hopes to wrap up tortuous negotiations on a debt swap this week when private creditors return to Athens for a fresh round of talks to avert a chaotic default, it said on Wednesday.

After weeks of bargaining, deadlocks and an intervention by euro zone ministers, Greece and its bondholders find themselves back at the drawing board as they search for a compromise needed to clinch a bailout for Athens before it runs out of money.

With time slipping ahead of a March deadline when Greece faces major bond redemptions, the top negotiator for private creditors, Charles Dallara, returns to Athens on Thursday to resume talks with officials, both sides said.

"The government aims to complete negotiations on the debt swap as early as this week," government spokesman Pantelis Kapsis told reporters.

"We are now in the most delicate phase of the negotiations to complete the debt swap ... It is clear that what happens in the coming days will affect the country's course for years."

The Institute of International Finance, which Dallara heads, said the latest discussions would be "informal" and aim to sort out all legal and technical issues quickly.

But the focus is expected to be on whether creditors budge from what they billed as their "final offer" of a 4 percent coupon on new bonds that Greece will swap out for existing debt, after euro zone finance ministers rejected that proposal.

Dallara left Athens over the weekend after the last round of talks proved inconclusive. He has pleaded for a quick resolution before time runs out but has not disclosed whether his group is willing to change its stance on the coupon, or interest rate.   Continued...

<p>A Greek (R) and an EU flag fly over the Greece's Finance Ministry in Athens November 3, 2011. REUTERS/Yannis Behrakis</p>